FedEx (FDX) and United Parcel Service (UPS) both dropped sharply on Monday after Amazon (AMZN) announced a major expansion of its logistics network. This will position the e-commerce giant as a direct competitor to UPS and FedEx in third-party shipping, freight, and fulfillment services. Mark Hackett, chief strategist at Nationwide, told Bloomberg that, “The stock price reactions are expected, though at this point, the direct impact is immeasurable and the reaction is likely exaggerated.”
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Forget margin or options. Here's how the pros trade AMZNAmazon has spent years building out its delivery and warehouse infrastructure, eventually becoming one of the largest parcel carriers in the U.S. by volume. The company now appears to be monetizing that scale more aggressively by offering logistics services to outside businesses, including end-to-end freight, warehousing, and parcel delivery solutions.
For UPS and FedEx, the development raises the competitive stakes in an already pressured industry. Amazon has already surpassed both companies in parcel volume domestically, and its continued expansion into third-party logistics could gradually erode high-margin commercial accounts that have long anchored traditional carriers. Hackett noted that today’s news will leave the fulfillment sector in “wait-and-see mode for some time.”
FedEx Stock Movement Today
FedEx stock was down 8.55% on Monday but was still up 25.39% year-to-date. The shares have also rallied 81.42% over the past 12 months.
Today’s news sparked heavy trading of FDX stock, as some 2.95 million shares changed hands, compared to a three-month average daily trading volume of about 1.87 million shares.
UPS Stock Movement Today
UPS stock was down 9.48% on Monday and has fallen slightly year-to-date. The shares were still up 12.57% over the past 12 months.
UPS stock trading activity today saw some 10.83 million shares change hands, compared to a three-month average daily trading volume of about 6.01 million shares.
FDX vs. UPS vs. AMZN: Which Stock Do Analysts Prefer?
Turning to the TipRanks stock comparison tool, traders can see which of these three stocks analysts favor. Amazon has the best analysts’ consensus rating at Strong Buy, compared to Moderate Buy ratings for FedEx and UPS. However, all of the stocks have similar upside potential at about 16%.
